How to Get Your Creditor to Pay You!: The Telephone Consumer Protection Act

In 2014, Capital One and three associated collection companies settled a class action lawsuit for 75 million dollars because they kept making unwanted phone calls to customers. Had they not settled, they could have been liable for over $10 billion dollars! The customers were successful in negotiating a settlement because of a law passed in 1991 in response to the ever increasing harassing phone calls by creditors and telemarketers. The Telephone Consumer Protection Act (TCPA) was designed to prevent United States citizens from receiving unwanted phone calls from telemarketers and creditors. The TCPA makes it illegal, with a few exceptions, for companies to make calls to a cellphone using an automated dialing system, or an artificial or prerecorded voice. For each call received in violation of this Act, a person is entitled to $500 in damages, and up to $1,500 for willful violations, from the party making the call. Companies, however, can still make calls using these methods for emergency purposes or when there is express consent from the party being called. Sorry fellow student loan sufferers — calls made solely to collect debt owed to or guaranteed by the United States are exempt from the TCPA, as well. The TCPA protects consumers from harassment by creditors and telemarketers. This post will focus specifically on debt collector calls to cellphones, as the rules differ for residential calls and telemarketer calls.

One of the key factors in a TCPA lawsuit is determining when a party has given their express consent to receive phone calls. The Federal Commission for Communications (FCC) has stated that a party has provided a creditor with prior express consent only when the cellphone number was given by the consumer to the creditor in connection with an existing debt and during the transaction that resulted in the debt. This consent also extends to third party collectors acting on the creditors behalf. For example, when a consumer provides a company with his/her cellphone number while making a free service appointment, the consumer is not expressly consenting to receiving calls about debts owed. However, if a person provides a phone number when making a purchase on credit, he/she will be viewed as having provided express consent to receive calls regarding that debt. The creditor will have to prove that express consent was granted.

Once a consumer has provided consent to receiving calls covered under the TCPA, the individual is not locked into receiving these calls forever. A person can revoke consent at any time and through any reasonable means. Examples of reasonable methods of delivering revocation include: a consumer-initiated call, a response to a call made by a creditor, or at a bill payment location in a store. These examples are not to be viewed as exhaustive. It is only important that the consumer makes it clear that he no longer wishes to receive calls in a reasonable manner.

There are a few steps consumers can take to prepare for a lawsuit if creditors continue to call in violation of TCPA. First, keep track of who you give your cellphone number to when making purchases. Second, if you receive autodialed or pre-recorded calls from a creditor, immediately revoke consent by expressly saying you do not want to receive the calls, if this option exists. While you can revoke consent over the phone, it would be best to also provide a written expression of your revocation, delivered in person, mailed, or texted to the company. It is helpful to have physical proof of your revocation. Third, keep track of any calls you receive from the creditor after your revocation, and discuss with an attorney if it is worth bringing a lawsuit.

For companies, the easiest way of avoiding a TCPA lawsuit is by stopping all auto-dialed and pre-recorded calls, however this may not be a feasible solution for all creditors. Additional ways of avoiding a TCPA suit include: recording when express consent is given; explaining in detail to employees what constitutes consent for calling a debtor; having a system in place to record when consent has been revoked; and making all company employees who interact with consumers aware of how consent may be revoked. Be sure to meet with an attorney to go over your company policy and ensure you are protected.